"Booming Electric-Vehicle Demand Supercharges Lithium Prices"

 Source:

Wall Street Journal

"A lack of investment in new supply is expected to lead to shortages of the battery metal.

Lithium prices are surging, sparking concerns about limited supplies of the battery metal that is crucial to the electric-vehicle boom.

Chinese prices for lithium, considered a bellwether because of the market’s higher liquidity and active spot market, have soared since the start of the year.

Lithium carbonate, a compound of the silvery metal used in the batteries that power most of China’s electric-car fleet, has jumped 68% since the start of the year to $11,250 a metric ton, according to Benchmark Mineral Intelligence.

The price rally marks a sharp turnaround for lithium.

A wave of investment in new mines until 2018—driven by over-exuberant expectations of demand for electric cars—created a glut of the metal that depressed prices.

But analysts and industry executives say the pandemic has proved to be a reset point for the market.

The gradual end to lockdowns has unleashed a wave of pent-up demand for electric cars that has whittled down surplus stocks of the metal, while governments have emerged from recessions with pledges to invest in clean-energy projects.

“The whole dynamic is completely changed,” said David Archer, chief executive of Savannah Resources, which is seeking to develop Western Europe’s first major lithium mine.

While battery-powered vehicles were once regarded as a niche product, they are now seen as the future of transport, providing solid future demand for lithium, he said ... "